Federal Real Property Asset Management: Additional Direction in Government-Wide Guidance Could Enhance Natural Disaster Resilience
Fast Facts
More severe and frequent extreme weather events threaten U.S. infrastructure. In 2020, 22 natural disasters caused over $100 billion in damages. Reducing the vulnerability of buildings, roads, and other federal assets can reduce costs to the government.
All 4 federal agencies we looked at—responsible for over 100,000 assets—improved asset resilience on a project-by-project basis and many had begun collecting data on current and future risks to assess their vulnerabilities.
We recommended that the Office of Management and Budget direct agencies to consider natural disaster risks when prioritizing investments across their asset portfolios.
A National Park Service Building in Washington D.C. with a Risk of Flooding
Highlights
What GAO Found
Selected agencies have taken some actions to incorporate resilience to natural disasters into their assets through processes used to make portfolio-wide decisions—known as “asset management”. GAO has previously identified characteristics for effective asset management, such as using quality data on assets. GAO found that selected agencies varied in how they incorporated resilience when applying these characteristics. For example, some agencies collected natural disaster risk data across their portfolios by conducting vulnerability assessments, whereas, others have not. In addition, officials from all four selected agencies said they primarily incorporate resilience information when constructing or repairing individual projects by using current design standards or assessing specific natural disaster risks. For example, according to officials from the U.S. Fish and Wildlife Service (FWS), a building at the McFaddin National Wildlife Refuge in Texas was able to sustain multiple hurricanes because it was rebuilt to exceed design standards.
Project at the McFaddin National Wildlife Refuge that Elevated Concrete Piers and Improved the Roof Design to Address Hurricane Risks
GAO found that federal government-wide guidance and requirements on asset management direct agencies to address risks such as climate change but do not explicitly direct them to incorporate natural disaster resilience into asset management decisions. In particular, a January 2021 executive order requires agencies to develop a climate action plan describing their vulnerabilities. However, neither this order nor Office of Management and Budget's (OMB) guidance require agencies to use the information collected to make investment decisions. Accordingly, agencies with high exposure to future natural disasters may not proactively incorporate resilience into decisions when prioritizing investments across their portfolios. According to the International Organization for Standardization's standard on climate change and GAO's Disaster Resilience Framework, organizations should assess how they might be affected by climate change, including natural disasters, and apply that information to decision-making. Using information gathered from tools, such as vulnerability assessments, can help agencies determine if an investment in assets to enhance resilience could provide the most value to the agencies in meeting their missions when compared to other potential investments.
Why GAO Did This Study
The federal government spends billions of dollars each year to manage real property assets, such as buildings, levees, and roads. The rising frequency and severity of natural disasters expose these assets to damage and the government to fiscal liabilities. In 2020, the United States experienced 22 separate billion-dollar natural disasters. As the owner of real property assets, federal agencies can enhance the natural disaster resilience of real property through asset management. This can include actions to prepare for disasters.
GAO was asked to determine how agencies prevent or reduce damage to real property caused by natural disasters. This report addresses (1) how selected agencies have incorporated natural disaster resilience into their assets and (2) the extent to which government-wide guidance directs agencies to incorporate natural disaster resilience into asset management.
To conduct this work, GAO reviewed key characteristics and principles for asset management and natural disaster resilience from GAO's prior work; reviewed agency documents; interviewed officials from four selected agencies that owned a large number of assets (U.S. Army Corps of Engineers, General Services Administration, National Park Service, and FWS); and reviewed OMB guidance.
Recommendations
GAO recommends that OMB direct agencies to incorporate assessments of natural disaster risk information, such as from vulnerability assessments, into asset management investment decisions. OMB had no comments on this recommendation.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Office of Management and Budget | The Acting Director of OMB should direct agencies to incorporate, as applicable, their assessments of natural disaster risk information, such as from vulnerability assessment and other risk assessments, into asset management investment decisions. Such direction could include, for example, updating existing guidance on capital planning. (Recommendation 1). |
The rising frequency and severity of extreme weather and climate-related events expose federal real property assets-including office buildings, levees, roads, and bridges-to damage and the government to fiscal liabilities. As the owners of real property assets, federal agencies have opportunities to enhance the resilience of their real property to these natural disasters through asset management-the processes and procedures used to enable portfolio-wide decision-making. GAO selected four agencies that owned a large number of buildings and structures, had assets located across the country, and had asset portfolios with high total replacement values in fiscal year 2018 (U.S. Army Corps of Engineers, General Services Administration, the Department of Interior's Fish and Wildlife Service, and the Department of Interior's National Park Service. In 2021, GAO reported that the four selected agencies had taken some actions to incorporate resilience to natural disasters into their assets through processes used to make portfolio-wide decisions-known as "asset management." However, the selected agencies varied in how they incorporated natural disaster resilience into their asset management efforts. For example, some selected agencies collected natural disaster risk data across their portfolios by conducting vulnerability assessments, whereas, others did not. Further, GAO reported that selected agencies generally did not include potential effects of natural disasters and climatic trends when prioritizing asset investments. Prioritizing investments can help agencies better allocate resources toward assets that will provide the greatest value to the agency in meeting its mission and objectives. GAO also found that federal government-wide guidance and requirements on climate change and asset management did not provide agencies direction to incorporate natural disaster resilience into asset management decisions. In particular, a January 2021 executive order on climate change and OMB guidance provided direction to federal agencies on some asset management activities, but they did not provide direction on incorporating natural disaster resilience, including climate actions, into asset management. By not applying such information, agencies with high exposure to future natural disasters may not proactively incorporate natural disaster resilience into decisions when prioritizing investments across their portfolios. According to the International Organization for Standardization's standard on climate change and GAO's Disaster Resilience Framework, organizations should assess how they might be affected by climate change, including natural disasters, and apply that information to decision-making. Accordingly, GAO recommended that OMB direct agencies to incorporate assessments of natural disaster risk information, such as from vulnerability assessments, into asset management investment decisions. Subsequently, Congressional staff sought GAO's input to develop the recommendation for OMB into legislation. In December 2022, Congress enacted the Disaster Resiliency Planning Act (the Act), which required the Director of OMB to establish guidance requiring the head of each agency to incorporate natural disaster resilience into real property asset management and investment decisions made by the agency. As a result of this Act, OMB will better position agencies to enhance the resilience of their asset portfolios. This enhanced resilience, in turn, could help limit the federal government's fiscal exposure from natural disasters.
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